Why 7.51 Million Won’t Make You Feel Rich

We spend our life searching for security by acquiring money. The irony is that money is not what brings us security.

Fidelity Investments just completed a survey of U.S. millionaires. 42% of those millionaires said they didn’t feel rich. Many named the “magic number” of when they would feel secure at 7.5 million. In other words, just a little bit more than they had now.

My guess is if a similar study was done, but this time only interviewing those with a net worth of over 7.5 million, they would get the same result. Even when John D. Rockefeller, one of the richest men of all time, when asked how much money was enough, he responded, “Just a little bit more.”

What makes you Secure?

If money, cars, clothes, first class trips, and houses don’t make you feel secure, then what does?

That’s easy–YOU.

You do this by detaching yourself from the desire to feel secure. You don’t give up the intention to create abundance in your life; you give up your attachment to the result. Once you let go of the attachment, you have freedom to create anything you want.

“Those who seek security chase it for a lifetime without ever finding it. It remains elusive and ephemeral, because security can never come from money alone. Attachment to money will always create insecurity no matter how much money you have in the bank. In fact, some of the people who have the most money are the most insecure.

The search for security is an illusion. In ancient wisdom traditions, the solutions to this whole dilemma lies in the wisdom of insecurity, or the wisdom of uncertainty. This means that the search for security and certainty is actually an attachment to the known. And what’s the known? The known is our past. The known is nothing other than the prison of past conditioning. There’s no evolution in that–absolutely none at all. And when there is no evolution, there is stagnation, entropy, disorder, and decay.

Uncertainty, on the other hand, is the fertile ground of pure creativity and freedom. Uncertainty means stepping into the unknown in every moment of our existence. The unknown is the field of all possibilities, every fresh, ever new, always open to the creation of new manifestations. Without uncertainty and the unknown, life is just the stale repetition of outworn memories.

How do you embrace the Unknown?

Start by defining your problems. Once you define your problems, look for opportunities.

Most of the people in that category (Millionaires) likely got there through deferred gratification, hard work, and frugality. Of course they don’t feel wealthy, in the same way that a squirrel who puts away acorns doesn’t feel wealthy, because he has put away resources for survival through hard work and foresight. The brain patterns associated with this behavior are what drives the need to accumulate wealth and resources, and do not change based on an arbitrary number.

Deferred gratification is true for many millionaires. Most millionaires are also people that get their happiness from experiences, people, and other non-monetary items. People who are frugal their entire life often don’t value material possessions enough to spend a lot of money. For them, what we call “frugality” may be normal and make them happier. For more data on how millionaire happiness is related to wanting more material goods check out, Stop Acting Rich: …And Start Living Like A Real Millionaire, by Thomas Stanley. Data also showed that millionaires happiness was not related to wealth. Happiness was related to enjoying their life choices, job, lifestyle, and family.

The reporting of the study in the Huffington Post, to which you linked, was just a bit biased by its selective picking of the most sensational-sounding data point.

For a whole host of reasons, I don’t find it terribly surprising that 42% of millionaires don’t feel wealthy. We live in a society that has always prided itself on the Franklinian ideals of the middle class–frugality, hard work, thrift, and so forth. Many people have no desire to remake their identity toward the aristocratic, and no amount of money in their portfolio will convince them otherwise.

And for others among the 42%, they’re just exercising the natural human tendency to look ever higher. Of course they’re not wealthy (as some apparently indicated) with less than $7.5M. That’s certainly not enough to get yourself a private jet, after all.

was this data:
“Of the 58 percent of millionaires who say they feel wealthy — up slightly from 54 percent in 2009 — they began to feel so at $1.75 million in investable assets, which is consistent with 2009 and up from $1.5 million in 2008.”

That would be my threshold, as well, although I have a ways to go. Wealth, by my definition, is sufficient capital to spin off enough annual income from some conservative investments (4%) in perpetuity to sustain a comfortable, middle-class lifestyle without any labor on the part of the individual. Wealth isn’t based on any particular material acquisition; it’s simply being happy with relative comfort, and no longer actually needing to get out of bed in the morning to keep the heat on or the refrigerator full.

I find the $1.75M figure particularly interesting because at a 4% rate of return, that yields $70,000 annually. Most studies that attempt to track happiness as a function of income find that $70k in annual income is just about the threshold where the happiness index levels off. Beyond that income lies rapidly diminishing returns. So we’ve found that $70k is enough to be happy, and not having to do any work for it makes you wealthy.

And as a final note, while I agree with the usual decision in this type of research to not include the equity in one’s primary residence as a contributing factor to counting potential respondents as “millionaires,” I totally disagree with the idea of not counting assets invested in retirement vehicles. Now I could certainly understanding adjusting down the balances in a 401k to account for any future tax liabilities, but $10M in a 401k is still a lot of money. It certainly makes you a millionaire.

Of course, that $10M is probably not invested with Fidelity and generating the kind of fees that fund this survey, so the criteria for these researchers should not be terribly surprising.

One of the most thought out comments I’ve ever read. Thanks for taking the time to write this.

You’re right, the Huffington Post does slant this article a bit to provoke traffic, which I myself did. I think my point still remains, I wasn’t surprised at all to hear why just “a little bit more money” would finally make people feel wealthy. Or as you said, “I don’t find it terribly surprising that 42% of millionaires don’t feel wealthy.”

My barometer for “wealth” is having enough to invest such that I can live off the passive income. Of course, how much money do I need to live? That’s subjective. Is it $40,000 a year? $60,000 a year? I like Coley’s comment, above, that $1.75 million in investable assets could be enough — that would generate 4% a year that you could live on, or $70,000. This makes a lot of sense to me.